The winner is the bidder whose valuation is the highest

Assignment Help Business Economics

Reference no: EM1311942

Q. Second-price sealed-bid auction. There are 20 bidders. Every bidder i values the object at vi > 0. The indices are chosen in a way so that v1 > v2 > ... > v20 > 0.

Every bidder i can submit a bid bi ≥ 0. Bidder whose bid is highest wins object. If there are multiple highest bids, then the winner is the bidder whose valuation is the highest (or whose index is the smallest) among the highest bidders (for example, if bidder 1 also bidder 2 have the highest bid, then bidder 1 is the winner).
The winner, say bidder i, gets a payoff vi - p, where p is the second highest bid (it equals the highest bid if there are multiple highest bids). Losing players receive zero payoffs.

a. Elucidate how that (b1, ..., b20) = (v1, ..., v20), i.e. every player bidding her valuation, is a Nash equilibrium.

b. Find out Nash equilibrium in that player 10 wins object. Explicate your answer.

c. (more difficult) Find all Nash equilibria in which player 9 wins the object.

Reference no: EM1311942

Questions Cloud

Determine the speed of the car when the driver slammed : Monochromatic light (640 nm) strikes a pair of slits at normal incidence, forming the double-slit interference pattern on a screen located 1.82m from the slits. It shows the interference pattern observed on the screen. What is the slit separation.

Objective type questions related to present and future value : Objective type questions related to present and future value of money and Market-determined required rate of return is the same thing as discount rate

Obtaining the simple linear regression equation : Obtain the simple linear regression equation, then analyze the residuals by (a) constructing a histogram

Calculation of quantitative analysis : Calculation of quantitative analysis to support recommendations and Would your answer differ if the cost of the containers were the same

The winner is the bidder whose valuation is the highest : If there are multiple highest bids, then the winner is the bidder whose valuation is the highest or whose index is the smallest among the highest bidders.

Calculate cournot nash equilibrium : Suppose two identical firms produce widgets and they are the only firms in the market. Find the Cournot-Nash equilibrium.

Finding number of traffic accidents after modification : At.01 significance level is it sensible to conclude that modification decreased the number of traffic accidents?

What will be the acceleration of c : A wooden rod of negligible mass and length 82.2 is pivoted about a horizontal axis through its center. A white rat with mass 0.440 clings to one end of the stick, and the mouse with mass 0.220 clings to the other end. The system is released from rest..

Evaluate of company''s net operating income : Determine of company's net operating income and quantitative accounting analysis.

User Account

All Pages